If Reported Profits Are Reduced by $6,000 in Year One

question 17

Multiple Choice

If reported profits are reduced by $6,000 in year one because of the operation of conservatism:

• A)profits in later years will be unaffected.
• B)profits in later years must be $5,000 lower.
• C)profits in later years will be $6,000 higher.
• D)none of the above.